It could cost Colorado taxpayers more than $318 billion to reach Gov. Jared Polis’ goal of attaining 100% renewable electricity by 2050, according to a think tank.
A report issued by the Independence Institute, a Denver-based group that advocates for policies to “enhance personal and economic freedom,” shows the cost to taxpayers for converting the electrical grid alone could be $318 billion by 2050. Energy Policy Analyst Jake Fogleman said it’s possible the average monthly residential electric bill could cost up to $628 a month by 2040.
“Since there hasn’t been any government anywhere on Earth that has 100% renewable energy, at least not for any sustained duration or period of time, we wanted to take a look at what exactly that would look like,” Fogleman said. “And we also wanted to model the costs of doing so because we hadn’t really seen very many good estimates out there.”
Polis and proponents of the transition away from fossil energy argue it’s ultimately good for the earth, as well as create a healthier environment for people and save Coloradans money, anticipating that, over the long term, renewable energy would be more economical to produce. Critics said the transition is happening too quickly, that it would be financially costly to people and businesses alike and that a diverse energy portfolio that incudes fossil-fired and renewable energy is more reliable and sustainable.
The governor’s roadmap outlines how to achieve its major goals, notably by transitioning to 100% electric cars on the road by 2050, which means all new car sales would need to be electric by 2040, as well as via a “large-scale shift” to electric heat pumps, powered by zero carbon electricity, for space and water heating” in buildings.
The Institute commissioned the Center of the American Experiment — the Independence Institute’s sister group in North Carolina that Fogleman said has been doing similar reports looking at efforts by various states, such as Minnesota, Wisconsin, and North Carolina — to assist with the report. Fogleman said they used an in-house model to calculate the costs and reliability impacts of various greenhouse emissions goals.
The report said that, since 2004, when the state enacted its first renewable energy portfolio standard, all-sector electricity prices in Colorado increased by more than 70% — from an average of 6.95 to 11.85 cents per kilowatt hour through 2022. Colorado’s prices are now the highest on average in the entire Mountain West region, according to the report.
“The landmark Greenhouse Gas Pollution Reduction Roadmap modeled a pathway to meet the State’s 2050 GHG emissions reduction targets,“ said Conor Cahill, the governor’s spokesperson, in a prior statement to The Denver Gazette. Cahill was referring to the Polis’ administration’s campaign to sharply curb fossil-based energy consumption in Colorado. “A cost-benefit analysis is a key component of policy development and ensures that these policies are good for both the environment and the economy.”
The Denver Gazette asked the governor’s office for a detailed cost-benefit analysis in January but received no documentation on the expected costs of the entire program. None of the biennial progress reports on the program contains cost estimates for the various programs, nor do they show the overall costs through 2050.
Instead, the governor’s office cited the differences in the wholesale price of coal, natural gas, wind and solar energy, arguing that, over the long run, the transition away from fossil-fired energy will translate to lower electricity bills.
“The clean energy dividend will mean significant cost reductions in utility bills. Coal energy costs about $0.11 kw/hour, natural gas is about $0.05-07 per kw/hour with wind power at about 2 cents a kWh and solar power at 3 cents,” Cahill said in response to the request. “So, the real question is, what would be the costs of staying on coal energy, rather than switching to less expensive forms of energy?”
He added: “The governor is always focused on saving people money and sees huge opportunities to save people money on energy, including through the market-driven momentum toward low-cost clean energy, which can also mean tax reductions. For instance, EV consumers will save money on federal and state gas taxes.”
The state has an estimate for the cost to owners of buildings larger than 50,000 square feet to meet an Air Quality Control Commission rule that takes effect on Oct. 15 — $2.55 billion for mandatory energy efficiency upgrades that must be completed by 2030.
The Colorado Energy office looked forward 27 years, to 2050, in estimating the benefits of the program.
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